Megyn Kelly’s moving to 9 p.m. and Greta let on months ago that she’s guaranteed a show in primetime in her contract. Barring an unanticipated retirement by O’Reilly or Hannity, that put Shep, who already has his own show in the afternoon, as the odd man out at 7 p.m. Presumably Greta’s moving there (Erin Burnett’s show on CNN in the same timeslot is similar as a catch-all for the day’s news, politics, and high-profile trials) and Hannity’s moving to 10 p.m., although Fox is still mum on that.

Lest you think this is a demotion, “insiders” tell TV Newser that Smith’s compensation will be second only to O’Reilly’s.

Shepard Smith has signed a new multi-year deal with Fox News Channel in which he will become the primary breaking news anchor for the network. In the process, he will lose his 7pmET “Fox Report,” while his 3pmET program “Studio B” will now be known as “Shepard Smith Reporting.”

In addition to the 3pm hour, Smith, who made his name with breaking news coverage, will now be the breaking news anchor for other Fox News programs. His new role will include a new studio, known as The Fox News Deck…

“Shep is a premier journalist and one of the finest newsmen of the modern era,” says Fox News chairman and CEO Roger Ailes, who came up with the concept. “He will exemplify the ethos that FOX News is when and where the news is, as it happens, no longer bound by a traditional evening format conceived in the 1960’s.” Ailes hinted at the changes during a 21st Century Fox shareholder meeting in August. “Shep and I have been working quietly on something we will roll out in September on how news is presented, a new way to deliver news,” Ailes said.

So he loses an hour of airtime but, in theory, makes it back via cut-ins during other shows to the “Fox News Deck” for car chases, hurricanes, etc. That’s actually a shrewd branding move on Fox’s part vis-a-vis CNN and MSNBC, I think. Fox dominates MSNBC under normal circumstances but they destroy them when news is breaking, partly because MSNBC, per its president, doesn’t much care about news anymore. It’s a left-wing opinion platform. If they’re going to cede the news-seeking audience to their competitors, Fox will take advantage by rolling out a splashy new “breaking news” division. It’ll also help versus CNN, whose ratings surge every time there’s something big happening. Many TV viewers don’t watch cable news regularly but switch to CNN reflexively when they need urgently to get caught up. Some don’t trust Fox for that because they regard it as nothing but a right-wing opinion platform. Solution: Create a special department devoted exclusively to news that’s led by an anchor who’s well known but not, shall we say, renowned for pushing right-wing opinion, then promote the hell out of it. The next time a bomb goes off somewhere, maybe some of those casual TV viewers will turn to Fox knowing that they’ll see Shep, not O’Reilly or Hannity.

One question, though: Doesn’t Fox’s audience, which skews older, like the idea of an hour of hard news at 7 p.m.? Younger news consumers don’t care about that because they get it online, but older audiences were weaned on TV news during the dinner hours. Then again, those viewers have also been watching Greta for years. No reason to think they’d mind seeing her at 7 instead of Shep.